Saturday, July 2, 2022

New FATF guidelines: A major threat to privacy coins like Monero, ZCash

The Takeaway:

New FATF guidelines have made it very difficult for crypto exchanges to allow trading in privacy coins. Exchanges like Coinbase and OKEx have delisted some of the major privacy coins from their platforms.

Since the FATF announced, its “travel rule” exchanges have been harsh on the majority of privacy coins as they continue to delist them from their platforms. Cryptocurrencies such as Zcash, Monero, and Dash makes it challenging for exchanges to comply with the regulators. 

According to the new FATF guidelines, crypto exchanges have to expose the information of users who would make transactions of $1000 or above. This privacy threatening guideline aims to help regulators keep a check on suspicious activities. Exchanges like Coinbase and OKEx have delisted some of the privacy coins from their platforms.

According to a Bloomberg report, the future of privacy coins is in the dark as getting delisted from the exchanges would dry up their liquidity. Since the FATF announced its new guidelines for crypto exchanges, the value in the prices of leading privacy coins has gone down drastically. 

Zcash, Monero, and Dash have a combined market capitalization of $2.5 billion. Since mid-June Monero’s price has gone down by 30%, Dash lost is value by 40% and Zcash almost dropped by 50%. 

However, developers behind these coins have insisted that these coins can be in full compliance with new FATF guidelines. Ryan Taylor, chief executive officer at Dash Core Group, told Bloomberg that Dash is identical to Bitcoin and is 100% capable of meeting the requirements. Binance CEO, Zhao Changpeng announced that the largest crypto exchange’s lending business would support Monero, Zcash, and Dash. 

FATF will conduct a review in June 2020 in its member countries to see how they are implementing the guidelines, and non-compliance could lead to a penalty and shutting down of the crypto exchange. Let us know in comments, what do you think about the new FATF guidelines and privacy coins?

Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Glenn Harper
Glenn Harper
Glenn has only two interests: Bitcoin and Aviation. After completing his graduation from San Diego State University in 2006, Glenn started working in the airlines and aviation industry. Aviation was his only passion before he came to know about bitcoin in 2012 after which he decided to dedicate 8 hours of his day for aviation and 8 hours for learning and writing about bitcoin and the technology behind it. Glenn lives with his wife and a 7-year-old son who mines ethereum on his computer and is also quite passionate about cryptocurrencies.

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